The Long-Run Relationship between House Prices and Income: Evidence from Local Housing Markets

Gallin, Joshua

doi:10.17016/feds.2003.17

Cited by 119 publications

(187 citation statements)

References 24 publications

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“…These variables provide information about income and social inequalities between and within the French zones d'emploi . However, MED FISCINC may also be considered as a good proxy for real estate prices (Gallin, ).…”

Section: Data and Descriptive Analysismentioning

confidence: 99%

The determinants of elderly migration in France

Schaffar

Dimou

Mouhoud

2019

Papers in Regional Science

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The aim of this paper is to study elderly migration in France. First, it analyses whether the decision to migrate relies upon individual characteristics. Second, it examines the ways in which the economic, social and environmental characteristics of the French territories determine the retirees' choice of localization. The paper draws upon a unique database of 12.67 million French inhabitants, with information about their personal attributes and locational choices from 2003 to 2008. It also uses an original database with locational characteristics for the French territories at the level of the 364 zones d'emploi. This is the only study on regional migration in France which builds upon such a thin spatial level of analysis. The paper builds empirical probit and Heckman models dealing with selection bias and endogeneity bias issues. The paper shows that retirees usually leave large agglomerations and old industrial areas in Northern France and the Paris agglomeration and relocate to socially and environmentally attractive zones with preferable climates. When studying the migration patterns within the zones d'emploi, it appears that the most vulnerable zones, which display a lower quality of collective services as well as higher income disparities and crime rates, feature lower elderly residential mobility.

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Section: Data and Descriptive Analysismentioning

confidence: 99%

The determinants of elderly migration in France

Schaffar

Dimou

Mouhoud

2019

Papers in Regional Science

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“…Muellbauer and Murphy () find that mortgage market liberalization, demographic shifts and income explain past U.K. house price growth. Error correction models are popular in this literature, with Malpezzi () showing that house prices correct to location‐specific, long‐run house price‐income ratios and Gallin () demonstrating the same with house price‐rental price ratios…”

Section: Literature Reviewmentioning

confidence: 99%

Can Tightness in the Housing Market Help Predict Subsequent Home Price Appreciation? Evidence from the United States and the Netherlands

Carrillo

Wit

Larson

2015

Real Estate Economics

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This article assesses the predictive power of variables that measure market tightness, such as seller's bargaining power and sale probabilities, on future home prices. Theoretical insights from a stylized search‐and‐matching model illustrate that such indicators can be associated with subsequent home price appreciation. The empirical analysis employs listings data on residential units offered for sale through a real estate broker in the Netherlands and for certain U.S. regions. Individual records are used to construct quarterly home price indices, an index that measures seller's bargaining power and (quality‐adjusted) home sale probabilities. Using conventional time‐series models we show that current sale probabilities and bargaining power can significantly reduce home price appreciation forecast errors and help to predict turning points in local area housing markets. The measures and approaches in this article help to demonstrate ways in which researchers and practitioners can leverage listings data to gain knowledge about the current and future state of the housing market.

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“…Indeed, another possibility is to estimate a cointegrating relationship, or vector error correction (VECM) model for each country and its housing, interest rate, income and current account variables. However, previous research (Meen, , Gallin, ) finds that housing variables are typically not cointegrated with fundamentals such as income. In the latter case, inability to reject the null of no cointegration prevailed even when the author was employing panel cointegration methods which have greater power than tests conducted on a single, national time series.…”

Section: Methodsmentioning

confidence: 96%

Home Prices and Global Imbalances: Which Drives Which?

Miles

2018

Kyklos

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Summary Many countries which experienced rising home prices (often described as bubbles) over the 2000s decade also ran large trade deficits. Some early research on the topic suggested that capital from trade surplus countries lowered borrowing costs and boosted housing values. In this scenario, the current account deficits and high home prices in bubble countries were driven in substantial part by capital flows from abroad. In contrast, some theoretical and empirical work suggests domestic factors‐rising home prices‐stimulate borrowing, which leads to current account deficits. In this more recent telling, it is domestic changes in bubble countries‐the increase in home values‐that drive trade imbalances, rather than the reverse. In this study, we investigate the interaction of both the current account and home prices for nine nations, with data spanning a minimum of the mid‐1990s to 2013, with the objective of determining whether external factors impact domestic housing markets. We use vector autoregressions and find strong evidence that the current account exerts a palpable effect on home values, even controlling for reverse causality and the effects of other variables.

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The Long-Run Relationship between House Prices and Income: Evidence from Local Housing Markets

Cited by 119 publications

References 24 publications

The determinants of elderly migration in France

The determinants of elderly migration in France

Can Tightness in the Housing Market Help Predict Subsequent Home Price Appreciation? Evidence from the United States and the Netherlands

Home Prices and Global Imbalances: Which Drives Which?

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